AMA: I’ve held Pre-MBA MM LBO, Growth Equity and Venture Capital investment roles for funds with $500M+ AUM to $5B+ AUM

TheBigBambino's picture
Rank: King Kong | 1,466

Hi All -

I'm ~5 or so years out of college. I did not do a formal 2 years of investment banking and was instead hired out of undergrad as an analyst at a fund. I've worked at several firms in several major US cities. I've worked at one smaller regional firm with $500M - $1B AUM and have since worked for larger firms with $3B+ and $5B+ AUM, both of which are well known and respected in the investment community.
In terms of deal experience I've worked on 10-20 deals so far in my career that have ranged from $10M Series A investments to $20M-$50M minority growth equity investments in unprofitable and profitable businesses to majority recaps/LBOs of businesses with $5M - $100M of EBITDA.

My career path was not normal and in 99% of instances is likely not replicable. I got help from connections, caught some lucky breaks and am not too interested in answering how to jump straight to the buyside or from VC to PE. I 100% advise you do banking or possibly consulting and then recruit for whatever interests you most afterwards.

Happy to answer questions on the following topics:
Venture Capital vs. Growth Equity vs. LBO
Differences in investing style and junior job role
What you will learn at each type of firm / most important hard skill experience
Recruiting from lesser known firms to better firms
Networking
Etc.

Anything else that you might find personally helpful
Thanks for all the help over the years WSO. Hoping I can be helpful back now. I may not actually get to answering questions for 24 - 48 hours but promise replies to everyone.

Bambino

Comments (58)

Aug 25, 2016

Thanks for doing this and congrats on being in PE.

How much is the MBA pushed for promotion in PE? It seems like many on WSO make it seem that B-school is a requirement to move up in PE.

Why do you recommend doing a Consulting or Banking stint first? Is it purely because of exits and brand? Because a local MM PE shop I'm interested in has people that are hired as analyst and it seems like a much more laid-back environment compared to IBD.

You mention recruitment.... what kind of positions do you see as a transition from a PE fund your size?

Thanks!

Aug 26, 2016

@BillBelichick12"
No problem.

1) In regards to the MBA I've come to see a degree of mixed opinions. I previously worked at a firm that is 2 years and then you are out, BSchool or no BSchool. I chose to lateral to another firm instead of do a MBA. I am taking the GMAT for the optionality but still unsure. I think firms and junior people have been much more open to not doing BSchool because the markets have been so good the last ~7 years. I know if the market slumped and I wasn't getting good deal experience I'd consider going to BSchool much more seriously. In terms of perception/requirements to move upwards I think it is still very present but the requirement or expectation is certainly decreasing. Ultimately I think it is a firm culture thing. Lastly, as you get to larger, older and more established firms you will find they are already fairly top heavy. BSchool is a natural and mutually beneficial way for a junior person to leave without issues. For example my firm does not require a MBA but probably only 1/8 associate will make Sr Associate given there are already 50+ investment professionals here. Rule of thumb: as you go up market (lower MM --> MM --> megafund) you should expect the MBA requirements to be more stringent

2) I 100% recommend IB/Consulting first with a bias to banking. I think this for several reasons:
- I did stage agnotic investing out of college with a bias to VC at a fund with an industry strategic component. As such I got to work on venture investments as well as participate in buyouts with some big firms. I ended up really liking the later stage stuff but in all honesty I did not develop the skill sets in my first year out of college to do PE. Through blood, sweat and tears + a lot of luck I was able to develop them and get a PE offer right as I was about to lateral to a MS/JPM/GS analyst position. What I learned was that in all honesty its hard to know what you really like doing when you are only 22.
- IB gives you a huge platform of skills that you can take to VC/PE/Corp Dev/Non Profit and be highly transferable. If you go to a fund strait out of college you can end up with only a vertical set of skills and they likely may not be very broad. Additionally, if you are getting hired by a fund out of college it is likely to be a weaker brand than the banks/consulting firms sans the rare TPG/Silver Lake/Vista jobs
- I would be cautious of a MM PE shop hiring undergrads. It's rare they will be staffed thoroughly enough to give you equivalent training to an IB. That could result in you simply have less hard skills, getting staffed on business development/sourcing and not deal work, and ultimately you will have a very hard time lateraling to another firm later one
- You should really consider the first 1-2 years out of school as very special and a time to work hard, grind and learn as much as you can. Opportunities you get staffed on correlate to you knowledge and abilities and that will compound extensively over the course of your career. The guys I know who worked in incredibly hard banking groups, not necessarily the most prestige ones, are by far the most effective and competent investors I have ever worked with

3) Recruitment: I get several email a week form head hunters. They are typically for similar jobs at similar funds. I also occasionally get emails from interesting statups as well. I'm sure if I tried I could transition to junior c-suite at a number of companies as well. A large number of associates at my firm go to portfolio companies. I personally have no interest in that.

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Aug 25, 2016

VC Hours? Did VC inspire you to want to make your own start up? Did you find the VC job enjoyable?

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Aug 26, 2016

@jnijnijn

VC honestly does inspire a lot of people to go do it. Most VC analysts/associates jumped to startups or other funds after their programs. Personally I am not the type of individual to want to do a startup. If I was to try and do my own company it would be trying to buy something small (say couple dental clinics with aggregate $5M - $10M of Revenue) and growing it.

VC hours are totally fine. In the bay area at the top firms you have a lot of ex GS/MSJPM tech/TMT IB analysts that work 9-5 and then go to happy hours form 6-8. The VC professional and social circles blur. You really have to live and drink it to be successful. The networking component is immense and vry important but pretty cool as well. Once you break in there are a lot of cool things to do especially at the junior level (guys put together giant trips, event, etc. only for active VC ppl).You also tend to get to work with venture MDs who used to be operators and have a lot of interesting experience.

I really enjoyed my VC job. It taught me how to develop a thesis and find experts who can validate it. Working at a firm with a strategic component gave me access as a 23 year old to CFOs and heads of Bus Dev at large multi-billion dollar corporations that were our LPs. We then leveraged that to make good investments. What I did not really learn was how to actually evaluate if a business model was super solid, the unit economics made sense, etc. VC's, in my opinion, seem to primarily back one of 3 things: Market, Team or Product and the big wins outweigh the write offs. I personally will take a lower rate of return to have all 3 in place, acquire a company and leave it to solid execution/expansion to make a 2x-4x return.

Sep 9, 2018

I am in a somewhat similar position in that I got into PE early but didn't get as much of the ibank training.
And like you I think it's a hole in my skillset.
How have you managed to close the gap?
I have access to biws and wallstprep but not sure how to attack this problem with limited Ted time available

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Aug 26, 2016

Thanks for doing this. I have two questions.

Do you believe that you caught up to your peers that did investment banking in terms of skill set? In other words, do you think you are better at PE four years of of PE vs someone who does 2-3years banking + 1 year of PE?

What was your compensation like straight of undergrad?

Thanks

Aug 26, 2016

@takenotes08

in general there are a few major categories of skill sets in my opinion. They include
- Hard skills: accounting, financial modeling, processing data and extracting insights, synthesizing/presenting insight clearly on paper and being able to do this very quickly with minimal errors
- Semi-Hard Skills: Knowing how to aggregate non-financial data (i.e. - market information, trends, expert opinions
- Soft skills: Generally being personable, being able to talk with executives, not being weird, having a balanced personality
- Being a thought partner: actually being able to take what you have learned are readily apply it to deal/conversation/objective you are trying to solve at a level that your MDs find your opinion worth listening to
- Deal Process skills: Multi-tasking, understanding all the process streams of a deal and effectively managing them

I think after ~5 years I am now fully caught up. However it was very hard to get there. When I started my PE job as an associate I was working 8am-9/10pm and then I was staying from 9/10pm-12/1am almost every night my first year practicing modeling, accounting, deal structure, debt, everything hard skills I was not as competent as my bulge bracket banking peers. I was lucky that I was at a firm that usually hired a mix of ex-banking and ex-consulting associates so they were accustomed to training less modeling/deal experienced new hires. I'd say after 1 year or killing myself I was as good as everyone else in the hard skills category.

On the soft skills/thought partner stuff I was already on par/stronger than my ex-banking peers. I had already spent two years having calls and meetings with executives where I actually had to talk and provide my thoughts. So I was comfortable with that.

One thing I have never fully caught up with though is doing things just as fast or as accurately or being as granularity knowledgeable in accounting. I think I'm ~85%-90% the way there and still better than the median ex-banker but my peers that came from very strong banking groups are just amazing. On a blended basis of all these skill sets I feel we are equally strong and provide different value adds to our deal teams and firm.

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Aug 31, 2016
TheBigBambino:

@takenotes08

in general there are a few major categories of skill sets in my opinion. They include- Hard skills: accounting, financial modeling, processing data and extracting insights, synthesizing/presenting insight clearly on paper and being able to do this very quickly with minimal errors- Semi-Hard Skills: Knowing how to aggregate non-financial data (i.e. - market information, trends, expert opinions- Soft skills: Generally being personable, being able to talk with executives, not being weird, having a balanced personality- Being a thought partner: actually being able to take what you have learned are readily apply it to deal/conversation/objective you are trying to solve at a level that your MDs find your opinion worth listening to- Deal Process skills: Multi-tasking, understanding all the process streams of a deal and effectively managing them

I think after ~5 years I am now fully caught up. However it was very hard to get there. When I started my PE job as an associate I was working 8am-9/10pm and then I was staying from 9/10pm-12/1am almost every night my first year practicing modeling, accounting, deal structure, debt, everything hard skills I was not as competent as my bulge bracket banking peers. I was lucky that I was at a firm that usually hired a mix of ex-banking and ex-consulting associates so they were accustomed to training less modeling/deal experienced new hires. I'd say after 1 year or killing myself I was as good as everyone else in the hard skills category.

On the soft skills/thought partner stuff I was already on par/stronger than my ex-banking peers. I had already spent two years having calls and meetings with executives where I actually had to talk and provide my thoughts. So I was comfortable with that.

One thing I have never fully caught up with though is doing things just as fast or as accurately or being as granularity knowledgeable in accounting. I think I'm ~85%-90% the way there and still better than the median ex-banker but my peers that came from very strong banking groups are just amazing. On a blended basis of all these skill sets I feel we are equally strong and provide different value adds to our deal teams and firm.

Wanted to follow up on this. What resources did you use to get yourself up to speed with modeling, accounting, deal structure, and other hard skills? Are there any you would recommend?

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Aug 26, 2016

Edit - double posted. Please delete.

Aug 26, 2016

Hey, thanks for doing this.

Quick question, was all of the moving around to different firms on your terms? A few firms in 5 years just seems like a lot to me. (I genuinely don't know if this is common place or not, not trying to be rude) Congrats on getting into the buy-side so early on.

Aug 26, 2016

I did 2 years as an analyst
Did an associate program
Lateraled to another buyside firm rather than do a MBA

Personally I think I'm ok with 3 jobs. However, I can see how one could have a different opinion here.

Aug 26, 2016

Any tips that seem to go unsaid around here? Especially networking.

Aug 28, 2016

@Bonzo Bojangles"

I likely can't say anything others haven't already mentioned over the years. In regards to networking I'd just add really don't be afraid to cold email. I've set so many it's well over 1,000. If you are trying to learn something just find people on linekdin and ask them for advise. This is not juts for job stuff but for learning. When I'm researching an industry or space I email 5-10 executives and ask for quick calls usually getting 1-2 on the phone.

Also, mentors are great but getting a large range of data points is important. I have a family member who has been super successful in finance but nowadays is essentially retired and arguably removed from the industry. I always get their thoughts but get 5-10 other's as well before making any important career decision.

Also, why not necessary, having at least 1 pretty big brand on your resume always helps.

Lastly, always see every opportunity all the way through. I've turned down 1-2 super days because I was 90% sure what I was going to do. Looking back though, I wish I did banking vs. VC out of college. I wish I didn't get talked into just ding VC and instead at least went to all the banking interviews. I might have realized then that PE was the better route for me and skipped VC all together. I tell this to a lot of kids in baking now too. GO to every interview you get even if at firms you don't like. At the worst case it's practice and you meet interesting people.

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Aug 28, 2016

Never thought about those things like that (especially cold-contacting just for a one-time thing). Thanks.

Aug 26, 2016

Any VC specific recruiting tips for IB analysts? I've read a decent amount on here and M&I but was wondering if you had any add'l color.

Aug 26, 2016

What career path would you recommend for somebody trying to break into the macro HF space (with the goal of eventually starting a fund)? I'm at a crossroads now. I have a return offer to a rotational sales & trading summer position (rising junior) at a BB, but I could probably leverage that for a banking internship. I honestly have very little interest in banking though, so I'm very tempted to accept the return offer. I'm also putting out feelers with large asset managers too.

TLDR - What are your thoughts on S&T and AM vs IB with the goal of breaking into the macro HF industry?

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Aug 26, 2016

Did you even read what OP wrote? His background has nothing to do with what you're trying to accomplish. What do you want to do at the HF? If trade, go back to your S&T seat. If invest, go into banking.

Aug 26, 2016

Yes, I did read what he wrote. He probably knows people who had to make the decision between HF and PE/VC recruiting during their banking stint. I'm sure his network includes people who went down the path that I'm interested in.

While it's not directly related to his career, I'm sure he could provide some valuable insight. If not, he's free to ignore my post. I don't see the harm in me asking.

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Aug 26, 2016

@bobusthebear-.

Hi. I don't personally have an issue with you asking this question but I'm not too qualified to answer. My only experience with HFs are with ones like like to recruit former PE associates. One of my close friends just finished his PE associate program and moved to easily one of the bets 5 macro firms in the US. I also am very interested in public equity / value investing so I try and work on this outside of my day job.

In regards to S&T I'm not sure how to get to a HF. I'm sure people have done it. Just don't want to give you bad advice so that is all I've got for you. Best of luck.

Aug 26, 2016

Thanks for taking the time to answer my question. It definitely seems the banking -> PE path is the more defined route. FX trading seems like it would be a lot of fun though, so it would be more pleasant if I can't make the transition.

Sorry for asking a question so far out of left field.

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Aug 26, 2016

If you are interested in public equities and value investing why not pursue that? I personally find pe to process oriented and am looking to switch to the public markets

Aug 26, 2016

Well look what we have here, Mr. kick ass over achiever. Fuck you op

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Aug 26, 2016

Question about investment perspective-

You mentioned how VC usually backs team, product, or market. I generally understand the fundamental differences in investing perspective from VC vs Growth vs PE (i.e. early stage vs growth vs mature, PE likes stable cash flows and a predictable market, etc.). I'm curious to know how your investing lens has changed on a more specific level. What are the questions you drill in on when interviewing management? What are the questions you ask yourself when evaluating the market? Where are the green and red flags in diligence? How did these differ across the positions?

Thanks for doing this.

Aug 26, 2016

Do you feel held back that you didn't do two years of IB, or do you feel at the same position as other associates who just came from IB?

Also how early did you start networking with people in PE? Kind of a generic question sorry, but did you straight up ask professionals how to get a job or focus on developing relationships.

Also thanks for doing this man! (Screw the butthurt mofo above me)

Aug 29, 2016

@BankerBanter

Thanks. I don't feel held back. However if I did it again I'd have done banking. I think there is immense value in it. When you think about Private Equity, there are few things that prepare you for it like banking, both from a process management and capabilities perspective. Also, there are a lot of times in a deal where you can just see through the banker BS based on how deals ran why in banking.

I started really networking for PE ~6 months after I started my first job. Mind you I didn't know until then I really disliked VC. I would encourage you to start talking with head hunters/firms earlier. I reached out to a lot of people and asked if they could introduce me to ppl in PE so I could get their advice given my situation. I ended up getting some amazing meetings with MDs/VPs at firms like TPG/General Atlantic/Etc. All I asked them was "how do I work at your firm in the next 5 years?". They often laughed and basically just said we hire from these groups at these banks, good luck otherwise and encouraged me to lateral to a bulge bracket bank. So I went down that path until I luckily landed a PE associate job at a well known MM LBO firm that hires a number of consultants and basically on-boarded me like I had been a consultant previously.

I knew I wasn't going to get a job from one of the huge famous firms and likely never would so I really just went into every meetings/call trying to learn. What has been most effective is most people I talked to I kept up with every ~6 months and they have always responded and been nice to me. They will still talk to me and some will meetup. None have ever hired me though, even after I asked some last year when I was trying to lateral. However, I'm pretty happy with the firm I ended up at so it worked out.

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Sep 2, 2016

Thank you for taking the time to do this AMA.

"What has been most effective is most people I talked to I kept up with every ~6 months and they have always responded and been nice to me. "

Could I ask how you followed up? i.e. how did you manage to make it worth their time to talk to you?

Thanks again.

Aug 27, 2016

How much is compensation for all levels (associates, VP, Partner etc) at a MM PE firm?

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Aug 28, 2016

I'm not sure what it is at all levels. An associate in MM PE should make around $190k - $250k all in though from the firms I or friends have worked at. A good number should also potentially offer co-investment opportunities.

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Aug 29, 2016

Were you at a "target school?" How much did your school play a role in landing that job (as opposed to just connections)?

Sep 24, 2016

No. I am not. However, I was in top 5% of my graduating class are a smaller non-target liberal arts school.

College did not help me. Got my break out of UG through an introduction to a family friend.

Aug 29, 2016

Have a friend that shares a similar profile to you. Great kid and very smart, but coming out of college he wasn't a competitive candidate nor did he have the adequate resume to go into investment banking. Ended up getting an analyst role at a ~$500M PE fund. Do you think you could have landed top BB IB coming out of college if you tried, and was your path that you took more of you having to adapt to what was your specific situation and try to make it work? In other words, did you take your first and second jobs because its what you wanted to do, or did you take them because it was the best option given the cards that you were dealt?

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Aug 30, 2016

Can someone please tell me or help me on how to effectively network, I am on linkedin and network through there but still no major result, what on Earth am I doing wrong?

Thanks!

Want to Lose the body fat, keep the muscles, I can help.

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Sep 1, 2016

Dude,

If you are on this forum and asking that question your are in the wrong weight class. I would start with a couple google searches on how to networking effectively or do some reading on M&I. Maybe even corner someone and ask them how to network.

Best of luck

    • 1
Sep 1, 2016

Just graduated undergrad and moved to the West Coast. I'm applying for FT research/analyst positions at several AM firms. At risk of defeating the purpose of this post, what's your "secret"?

Sep 3, 2016
welma:

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Cross your heart and hope to die ?

Sep 13, 2016

Thanks for this, very informative. I am in a similar position- did a banking internship, had differing opinions than yours and took a VC offer that is reputable in the vertical.

I will be starting in a few months and I have a few questions:

1) Would you be able to be more specific in the required hard skills for later stage funds? What type of relevant modeling did you practice? e.g. waterfalls and options? 3 stmt projections w/ irr and return multiples?

2) Why did you prefer later stage/LBO over VC?

3) Did the MD's at the larger funds have any concerns over your VC background vs. when looking at an i-banking analyst? If so, what were they?

4) What were some of the differences in values and focus in the deal room between the various sizes of the funds you worked at? (i.e. cashflow for LBO shops etc.)

5) Any advice on how to crush performance at a VC firm?

Sep 28, 2016

@VCbabymonkey

1) Hard / later stage specific skills that come to mind (not comprehensive)
- Strong accounting and finance knowledge
- Understanding the core aspects that make a company a strong LBO candidate
- Understanding debt / capital structure
- Strong excel and financial modeling abilities, from different aspects
--> Format and time efficiency
--> Large data sets analysis
--> Proper LBO, financials statements modeling
- Ability to condense large amounts of information and data into digestible summaries in short periods of time that are very accurate
- Understanding how a traditional banked LBO deal process works
- Understanding the managerial nuances that occur with larger companies vs. startups
- etc.

2) I respect VC and have no problems with it. I personally prefer traditional profitable companies where you are focused more on business strategy and execution. I would rather take a business that is performing at mediocre efficiency, buy it for a decent price, augment the strategy, operations, management team, M&A strategy and capital allocation efficiency to improve margins, growth, reputation and overall performance in order to realize a respectable return (20%+ IRR). I like knowing that if you gave me $10M I believe I could buy a small business (say $3M - $5M EBITDA) with debt and successfully double it in ~5 years based on what I've worked on. I also personally like the public markets and value investing. The mentality + the technical and fundamental skill sets I developed are much more applicable to this asset class than most VC skill sets.

3) Yes. Nearly all didn't give me job offers and told me to go do IB. You should realize that most prominent VCs even tend to hire mostly BB tech IB analysts or the alike as well. I got a job offer from a BB banking group first but luckily ended up not having to do it. I then got lucky with staffing and worked my but off and ended up being right on par with other associates after a few months. If I had to do it again I would say do not try and lateral from a VC oriented group to a PE oriented group - it's really just not common and there are reasons for this.

4) Fund size won't dictate partner personalities. It's just deal type, etc. VC partners and LBO partners just look at the world differently. I'm not sure how to describe it to be honest. When you compare a LBO MD who was previously the CFO or a fortune 100 financial services company to a VC who was previously the head of product at a fortune technology or eCommerce company their checklist for what creates an interesting investment opportunity is just different.

5) Source an investment opportunity. Know how to network. Information is king. Merge your social and work life (aka associates at other VCs should be actual friends and in your social circle), really learn how your MDs think about the world and what they believe results in good investments -- apply that to your thought framework, learn how to identify a thesis, map an industry and segment companies, learn how to assess the validity of a business model and it's long term durability. And a million other things.

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Sep 19, 2016

Thanks for this, keeping an eye on your answers as I start to think about next steps in my career (just started as analyst at an MM IB). Hoping you'll come back to this and answer some more.

I don't have very organized thoughts right now so I'll just ask a broad question -- how did you see the day-to-day work differ between growth equity, VC, and LBO?

It sounds like you believe that traditional LBO shops give a stronger learning experience. Do you think this would be the case for someone who gets more enjoyment out of digging into the growth strategy of a company and market sizing, etc?

Best Response
Sep 28, 2016

@fallensyrup

First, definition of growth: Minimum of $3M EBITDA and up (can be substantially higher) and growing revenue 20%+ YoY.

All in all here is how I see core differences between growth and LBO shops:

In VC you are really just networking and thinking smart. You are placing strategic bets. You are becoming extremely smart in specific industries, what is most valued in the space, what allows companies to ramp the most efficiently, what will let companies maintain competitive advantages, etc. At the end of the day you are developing a strong network and betting on companies that match a thesis you believe in, seem to have a good product and business model, and hopefully is something a strategic would want to acquire down the road, either for your novel business or strong management.

In LBO you are doing one thing: trying to identify and structure a good return. This is much more technical. You will spend most of you week reading through CIMs, making a proposal if you should spend more time on it based on your beliefs that the company and the market are attractive, etc. If your VP agrees then you will usually build a mini-lbo model to make sure the math can work, present to your IC and submit an IOI. If that goes well you will dive into the company in excruciating detail. You can't lose money here and you need to be very positive you're making a decent return no matter what. This is more technical and time consuming. You need to be strong at accounting, capital structure and debt markets, deal process, legal and tax structure, etc. These independent knowledge sets build over time with reps but once you get good at them all it's pretty powerful. Furthermore, you are then the owners of a business. You are the final decision maker on what is the best use of cash flow. Is it M&A, growth initiatives, paying down debt, doing a dividend? All in all your job is to understand how to derive good decisions from a financial mindset.

Growth, as defined above, is a bit of a blend of both but with a PE/LBO mindset. We're not making moonshot bets, we're security type and structure flexible investors that try to yield high returns. You are doing a mix of cold calling/sourcing and reviewing bank CIMs. The big difference from VC from the sourcing perspective if often he companies don't what to talk with you and you have to convince them 1) to answer the phone, 2) to want outside capital and 3) not use a banker. You may be doing a traditional LBO or you may be doing a minority ownership investment with structure. Because of the less formal structure of this asset class vs. LBO it can be less technical. You may not be building intensive 3 statement models and because you are able to grow organically at a 20%+ revenue basis you're often not doing max leverage so the facilities and the nuances can be less technical. On the flip side, you may be getting a better sense for how to operate a business at the granular level, you may be learning how to evaluate a small business (such as a $3M rev / $500k EBITDA add on) that is doing cash accounting and using quick books. All in all you will be less technical than a LBO shop but its still a fairly robust and financially talented group of professionals.

Regarding your specific question, I think you can learn a lot in both growth and LBO, it's more a factor of what your firm will let an associate do. I feel like growth groups give a bit more autonomy. However, when it comes to getting hands on with growth strategy, etc. I guess I'll say this. In my LBO job after we did a deal we hired Bain & Company to evaluate and help pick 2/10 $1-5M growth investment initiatives. In my growth job we bought a company, got 2 really successful industry executives to join the board and I work with them + our CEO/CFO to help implement changes across the company.

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Oct 26, 2016

Hi! Thank you so much for doing this. I read through the comments and your answers, and they were very helpful. But one thing that was missing and that you mentioned you actually wanted to answer was "recruiting from lesser known firms to better firms." I am about to start at a "lower tier" BB (Barclays/DB/UBS), and it is obviously not "lesser known" by any means because it is a bulge bracket, but it is not the most prestigious. In the thread, you mentioned that many top VCs and growth equity shops typically only hire from top BB groups, so I was just wondering how I could still get to those kind of buy-side opportunities from where I am. Am I better off lateraling or should I recruit straight for the buy-side?

I would like to go into growth equity (I really like VC but I think growth equity would be a good way to test the waters before diving straight into the super early stages), and I've seen people from Jefferies/Baird/Financial Technology Partners/William Blair, etc. get into good growth shops but there are definitely many others from top BBs/EBs as well. I am targeting places like KKR Growth/TPG Growth/General Atlantic (which I understand may be beyond my reach) and also some of the more practical ones like Summit/TA. How can I best position myself to get to one of these places given where I am?

Thanks so much!

Nov 6, 2016

Apologies if this was asked already: What are you up to now?

Jan 31, 2017

I'm a 3rd year associate focused on LBO's and minority growth rounds in businesses with $0-40M EBITDA (sweet spot $5-20M). Hoping to make VP in next 12 months. We will see how that goes...

Jan 31, 2017

Hi,
I'm currently a senior in undergrad and am looking for full-time opps. As of now, I have interviews at two firms: a growth equity (~$300mm last fund raise) and a secondaries (fund raise in low $Bn's).
Background: I am studying Finance and have previously interned at a BB within its IBD coverage group.

I wanted to know your thoughts on my situation.
1. Based on your previous comments, would you still recommend that I try recruiting into a small M&A shop or the sorts, instead of trying to go buyside early on?
2. In a hypothetical scenario, I get an offer from both of the PE companies. Which would you recommend I take? or What factors should I take into consideration when making my decision? Do you feel that after two years at one of these firms, I will have the ability to try to go into a larger fund/something like Carlyle, etc?
I know that the growth equity will have more sourcing work vs the FoF that will have me do mostly modeling.

Thank you in advance and appreciate your advice.

Jan 31, 2017

Firstly, congrats on your success. Apologies for the slightly blunt thoughts below. Just know you're further then most on this forum and asking the questions I did not figure out until 1 year post-undergrad.

In my personal opinion, if you have a 3rd option to do BB or elite boutique banking I would probably take that over either. You state your goal may be to eventually end up at a larger fund or even a mega fund. In my opinion, neither of these offers would get you there.

I would personally say never go to a secondaries fund no matter what if you want to do PE. I've literally had one of the head MDs at a Bain/KKR/Carlyle firm tell my friend who had a secondaries offer at Blackstone that "secondaries is where you go to die. Do banking and recruit for PE afterwards". My friend turned down the Blackstone offer, did banking and now he is a MM PE associate at a solid firm.

On the growth fund the issue is you will likely only be a sourcing analyst. This experience won't be looked on highly by any PE fund, especially the larger ones. You would most likely get the opportunity to move into an operational role at a really solid company after 2-3 years at the fund. Perhaps you could lateral to a more prominent growth fund as an associate but I know my firm wouldn't consider a growth sourcing analyst out of understand vs. a 2nd year BB analyst.

If these are your options, I'd probably recommend you really make your goal to get into a top BB banking class after 1-2 years at either job (probably the growth fund because at least you'll get exposure to PE).

Sorry to be bleak. Serious congrats on the offers if you get them. It's just very tough to move up to larger funds from smaller funds and into a transaction role vs. sourcing or secondaries role.

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Jan 31, 2017

Appreciate the advice. I wanted to know more about why "Secondaries is where you go to die." I know that in a traditional PE, I would be valuing the actual company vs. the fund as a whole at a Secondaries. However, in the Secondaries, I would see a wide variety of business models that would span across industries. Does that count for anything? Also, the junior level employees there told me that they spend most, if not all, of the day modeling, so I presume that I would definitely gain something that would help me leverage that into movement forward. Or am I wrong?

Also, for the growth equity, I definitely agree with your comment. From my conversations, it seems sourcing heavy (~60% or slightly more) and I am a little cautious going forward. My dilemma is that I am recruiting now (an off-peak time) and a lot of places have stopped recruiting, so I am at a loss at how I can get to the banking type roles for full-time. Any advice for what companies I should look at specifically going forward or how I can go about getting that banking type role? Also, a smaller shop M&A Advisory type firm would be fine to start at too, right?

Apologies for the multiple questions, but I am really trying to figure out how to graduate and be employed by then. Many thanks!

Mar 8, 2017

Hi,

How likely is it to move up to larger funds later on, if one starts at a AUM 500 million PE shop as an analyst straight out of graduation? Talking about 1-5 billion MM shops.

Apr 10, 2017

Hi. Just saw this now.

I wouldn't say it is harder to move to a larger fund. It is however more difficult to move to a different stage of investing.

For example is it harder to move from venture or M&A of $5M - $15M EBITDA companies to M&A of $50M - $200M EBITDA companies.

So if you're $500M AUM shop is a $500M Fund I, I could see moving to a more tenured $1B - $5B AUM shop possible, it really just depends if you have applicable skill set sand experience.

I also see you say you're an analyst and that would make me wonder what you are doing at your fund today. Most funds like guys out of banks/consulting firms as most PE funds don't train their analysts appropriately.

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Apr 14, 2017

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May 24, 2017

Thanks for giving back.

I'm a junior at a non target with a 4.0 and landed a growth internship for the summer (~50% sourcing) at a MM shop. I'm having some trouble seeing the path forward for all of the reasons you have mentioned in this thread. How would you recommend spinning an undergrad PE internship? Thanks again - I appreciate ya.

Oct 22, 2018

Thanks for posting. I'm considering lateraling from tech into IB and appreciated the incredible detail of your post.

Best of luck to you in future, though I doubt you'll need it with that killer work ethic.

Oct 23, 2018

Any sort of practical things that non-IB analysts can do to work on the more technical side of evaluating deals (for those of us who have already done BIWS/have decent accting finance skills)? Talking about maybe a list of case studies or other things that would help in really solidifying the deal evaluation framework for those of us who don't do this daily in our FT job.

Nov 14, 2018
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Dec 16, 2018
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Feb 20, 2019